Virginia's return to the Regional Greenhouse Gas Initiative (RGGI) is driving carbon allowance prices sharply higher. The June 2026 auction cleared at $35 per ton, a 40% jump from March and 78% higher than a year ago. With Virginia power producers needing allowances starting July 1, the state is on track to collect over $800 million annually from electricity generators burning natural gas, coal, or oil. A legislative panel is now discussing whether to rebate some of that revenue directly to customers rather than spending it all on efficiency programs and flood control. Dominion Energy Virginia, the largest allowance buyer, is expected to seek a rate increase of $7 to $8 per 1,000 kilowatt-hours to cover costs. Critics argue RGGI's design encourages importing power from non-member states like Pennsylvania and West Virginia, undermining its goal of reducing emissions. The debate highlights a tension between carbon pricing revenue and household electricity bills. As allowance prices rise, the question of who benefits from the carbon tax is becoming impossible to ignore.
